EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1012538
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Wizard Power Pty Ltd applied for a TCO in respect of certain mirrored glass plates on 12 March 2010.
Instrument
TCO No 1012538 was made on 04 June 2010. It declares that those certain mirrored glass plates are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 1012538 is taken to have come into force on 12 March 2010.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901, enacted by the Parliament of Australia, provides for a scheme whereby Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This legislative framework was designed to address the problem of imposing lower rates of customs duty on certain goods, provided they meet specific criteria, thereby promoting trade and economic efficiency. The objective of this scheme is to facilitate the importation of goods that are not produced domestically, thereby supporting industries that rely on imported materials. In line with this policy, the Tariff Concession Instrument No. 1012538 was issued on 4 June 2010, following an application by Wizard Power Pty Ltd for tariff concessions on certain mirrored glass plates. The instrument was effective from 12 March 2010, the date the application was lodged, and it lowered the duty on these goods from 5% to free, benefiting importers who could claim refunds for duties paid before the concession was applied.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines the process for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders apply to specific goods, providing a lower rate of customs duty. The application for a TCO can be made by any person, provided the goods in question are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO evaluates whether the application meets the core criteria, which include the absence of substitutable goods produced in Australia in the ordinary course of business. If the criteria are met, the CEO issues a TCO that applies to the specified goods, as illustrated in TCO No 1012538 for certain mirrored glass plates, which were granted a duty-free status. The application process includes a requirement to publish a notice in the Gazette, inviting submissions from any interested parties; however, no submissions were received for TCO No 1012538. The TCO has retroactive effect from the date of application lodging, beneficially impacting importers who can apply for duty refunds on goods imported since that date. This legislative framework allows for the flexible adjustment of customs duties on specific goods to facilitate trade, while ensuring that existing rights and liabilities are preserved.
Key Provisions
The main operative sections of this legislation detail the process and criteria for the creation and implementation of Tariff Concession Orders (TCO) under Part XVA of the Customs Act 1901 (s 269F, s 269C, s 269B, s 269P(3)). A TCO application can be submitted to the Chief Executive Officer of Customs (the CEO) by a person seeking a lower rate of customs duty for specific goods (s 269F). If the CEO determines that the application is not for goods listed in section 269SJ, and meets the core criteria specified in section 269C, a TCO is issued. Section 269C stipulates that the application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (s 269C). The definitions of key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269D respectively. If the CEO is satisfied that the application meets the core criteria, they must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (s 269P(3)).
The obligations imposed by the Customs Act 1901 on parties or entities governed by it include the requirement for the CEO to assess TCO applications against the core criteria (s 269C). If an application is deemed valid and meets the criteria, the CEO must issue a written TCO (s 269P(3)). Furthermore, the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (s 269K(1)). In the case of TCO No 1012538, the CEO did not receive any submissions. The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on any person in respect of actions taken before the TCO's registration date (s 126(1)(r)).
In terms of consequences for breach, the Customs Act 1901 does not explicitly outline offences, penalties, or civil/criminal consequences for non-compliance with the TCO provisions. However, it is reasonable to infer that failure to comply with the Act's requirements could lead to legal action or penalties under other relevant sections of the Act or related legislation. For instance, section 239 of the Act provides for penalties for providing false or misleading information, which could potentially apply in the context of TCO applications. The maximum penalties for such offences could include fines of up to $22,200 for individuals and $111,000 for corporations, as per the Crimes Act 1914. It is also worth noting that any person adversely affected by the implementation of a TCO could seek judicial review or other legal remedies under the Administrative Decisions (Judicial Review) Act 1977.